The W-4 form is that confusing tax form given to you on your first day on the job. The form asks you questions like, "Would you like to claim yourself?" Um, wha? You are expected to just magically know. Now you'll have it magically written down and explained.

Overview

The W-4 form let's you decide when you want to pay your taxes to Uncle Sam.

Uncle Sam is either going to take too much out of each paycheck and then pay you back at the end of the year, or he'll take too little out of each paycheck and you'll owe him some money in April.

Either way, Uncle Sam will get what's coming to him. That's why we have Tax Day, April 15th. It's Uncle Sam's chance to settle the score.

Problems With A Zero

For most people, if you choose "0" on your W-4 form, you'll get back a refund at the end of the year. "Hooray!" you say. Now we'll explain why this may not be the best idea.

If you get money back at the end of the year, you've paid too much in taxes over the course of the year. The refund was your money from the start. It's like getting your old sweater as a birthday gift. Thanks, Mom!

Choosing "0" is sort of like a forced savings account. Money is taken from your paycheck, sent to Uncle Sam, and returned to you at tax time.

Here's the problem: Uncle Sam earns interest on your money while he holds it and never passes this interest onto you. "Boo!"

If you spend money like the world might end on Tuesday, then choosing "0" may be a good savings option for you. But since you won't earn interest on this savings, it's not your best economic option.

Unfortunately, Uncle Sam doesn't allow you to claim 45 allowances and earn interest on all of his money. (He's funny that way.) If you put down too many allowances, your chicanery will raise a red IRS flag.

Memory Device

Only a "zero" would put a zero on a W-4.

Story Time

When Bert was a forward for his high school soccer team, he wore the number zero on his jersey.

After missing a kick in the big game, fans taunted him from the stands, "Nice kick, zero!" "Eat dirt, zero!" For weeks, he had night terrors of that kick and those mean, mean fans.

Years later, Bert's HR representative gave him a W-4 form and explained, "You can put down a 0, 1, 2 or whatever on your form."

Suddenly, years of repressed memories bubbled up to the surface of Bert's tiny brain in one volcanic blast, "I AM NOT A ZERO! I AM NOT A ZERO!"

His HR rep paused, and then calmly replied, "Okay Bert."

And from that day forward, Bert was no longer a zero. He put down a one on his W-4.